Legislature gives final ok to bill suspending construction fee

A 2.5 percent fee on commercial construction projects, used to fund affordable housing, would be suspended under a bill approved this week by the state Legislature. The bill's sponsors say that they don't want to discourage development at a time when the state economy is still recovering from the recession.

The bill now goes to Governor Christie.

The fee, which was established in 2008 and is paid to towns, has been suspended twice since then, for a total of four years, to encourage construction in a difficult economic climate. But the latest moratorium on the fee expired a year ago. The bill would suspend the fee again, going back to projects started since July 1, 2013, and lasting until the end of this year.

Under the bill, municipalities that have already collected the fee since last July would return that money to the developer, unless it has already been spent on affordable housing. The fee is based on the assessed value of the project.

The bill's sponsors say it's necessary to suspend the fee while "the state still struggles with high unemployment and paltry economic growth," in the words of Assemblyman John J. Burzichelli, a South Jersey Democrat. The bill was approved unanimously in the Assembly and 29-1 in the state Senate.

The proposed moratorium on the fee has the support of the New Jersey Business and Industry Association, which cited the high cost of doing business in the state. But affordable-housing advocates criticized it.

"We're very disappointed the Legislature voted to approve the moratorium," said Nina Arce, spokeswoman for the Housing and Community Development Network of New Jersey. "For developers, the fee is a small cost of doing business, but for our hardworking families, seniors and individuals living with special needs who can't find an affordable place to live, it makes a big deal.... If people cannot afford their housing costs, they're not going to spend money in the stores, restaurants and other businesses that contribute to a booming economy."